Pound Advances As BoE Broadbent Says UK Better Placed For Rate Hike
04 August 2017 - 07:50AM
RTTF2
The pound rose against its major opponents in the early European
session on Friday, after the Bank of England Deputy Governor Ben
Broadbent remarked that the U.K. economy is better positioned to
adjust with a possible rate hike as the inflation would peak in the
second half of the year and wage growth would pick up in coming
years.
Speaking to BBC radio, Broadbent told that there are
possibilities for interest rates to go up a little than expected by
the financial markets.
"We have got to recognise that changes in interest rates take
time," he told. "We can't look just at what is happening now, we
have to look at what might happen in the medium term.
"I do think the time is likely to come when rates will go up
generally," he added.
Investors sentiment lifted up ahead of the all-important U.S.
jobs report due later in the day that should shed further light on
investor expectations for interest rates.
The report is expected to show employment climbed by 183,000
jobs in July, while the unemployment rate is expected to dip to 4.3
percent.
The pound held steady against its major counterparts in the
Asian session, with the exception of the Japanese yen.
The pound advanced to 1.3164 versus the greenback, 1.2739
against the franc and 0.9026 against the euro, from its early lows
of 1.3128, 1.2713 and 0.9048, respectively. The next possible
resistance for the pound is seen around 1.34 against the greenback,
1.30 against the franc and 0.88 against the euro.
The pound edged up to 144.93 versus the yen, from its early
session's low of 144.38. If the pound-yen pair extends rise, 146.00
is likely seen as its next resistance level.
Preliminary report from the Ministry of Health, Labor and
Welfare showed that Japan's total labor cash earnings decreased for
the first time in thirteen months in June, defying economists'
forecast for a further rise.
Gross earnings dropped 0.4 percent year-over-year in June,
reversing 0.6 percent rise in May, which was revised down from a
0.7 percent gain reported earlier.
Looking ahead, U.S. and Canadian jobs data for July, U.S. trade
data for June and Canada Ivey PMI for July are set for release in
the New York session.
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